Alliance Financial Corp. reported net income of $2.7 million, or $0.59 per diluted share, in the first quarter of 2010. The company earned $2.6 million, or $0.57 per diluted share, in the same quarter of 2009.

“Throughout this difficult economic cycle Alliance’s earnings and asset quality indicators have consistently outperformed industry averages, and our first quarter performance continues this trend,” said Jack H. Webb, the CEO of Alliance Financial Corporation.

Webb indicated that despite the improvement in results, loan demand was still weak due to reluctance by businesses to borrow because of the uncertain economy.

Alliance Financial Corporation reported a sequential increase in total deposits, to $1.1 billion at the end of the first quarter of 2010. This represented an increase of 5%, or $54.3 million, from the end of 2009. Total assets were reported at $1.4 billion, flat with the end of 2009.

Alliance Financial Corporation is a bank holding company that owns Alliance Bank, N.A., a commercial bank with 29 branches in upstate New York. Alliance Financial Corporation also owns Ladd’s Agency, Inc., an insurance agency, and Alliance Leasing, Inc., an equipment lease financing company.